Business, Economics and Jobs

Citigroup shares soar on plans to cut 11,000 jobs


A cyclist rides his bike past the Citigroup center on April 18, 2011 in San Francisco, California.


Justin Sullivan

Shares in Citigroup jumped about four percent in early trade Wednesday after the US banking giant revealed plans to slash more than 11,000 jobs as part of “repositioning actions to further reduce expenses and improve efficiency.”

Citigroup said it would take a pretax charge of about $1 billion for the job cuts, which come less than three weeks before Christmas, The New York Times reported.

Nearly 2,000 jobs would be eliminated from Citigroup’s institutional clients division, a move designed to “streamline our client coverage model in banking and improve overall productivity in our markets business, especially in areas experiencing continued low profitability such as cash equities,” Citigroup said in a statement.

USA Today said 6,200 jobs would be cut in Citigroup's global consumer banking business, while another 2,600 jobs would disappear in the operations and technology group.

"These actions are logical next steps in Citi's transformation,” Citigroup chief executive Michael Corbat said in the statement.

“While we are committed to — and our strategy continues to leverage — our unparalleled global network and footprint, we have identified areas and products where our scale does not provide for meaningful returns. And we will further increase our operating efficiency by reducing excess capacity and expenses, whether they center on technology, real estate or simplifying our operations," he added.

Corbat replaced former chief executive Vikram Pandit, who resigned suddenly in October. Wednesday's job cuts are in addition to those announced by Pandit in January, Bloomberg reported. 

Citigroup, The New York Times noted, nearly collapsed during the global financial crisis and received a $45 billion government bailout. 

As part of its cost-cutting drive, Citigroup said it would sell or scale back consumer operations in Pakistan, Paraguay, Romania, Turkey and Uruguay, the BBC reported.

Other countries affected by the changes would be Brazil, Hong Kong, Hungary, South Korea, the United States, Greece and Spain.

Citigroup plans to "focus on the 150 cities that have the highest growth potential in consumer banking."

More from GlobalPost: Vikram Pandit, Citigroup CEO, resigns abruptly

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